Under RPAPL 1304 the Department of Financial Services shall post the 90 day Notice on its website in the six most common non-english languages spoken by individuals with limited Enlish proficiency in the State of New York, based on United States census data.
Please note that Bengali has been added to the list of languages.https://www.dfs.ny.gov/apps_and_licensing/mortgage_companies/hetpfnotice
For more information, please contact Deborah Gallo, Director of Operations at [email protected]
“[P]roper service of RPAPL 1304 notice on the borrower or borrowers is a condition precedent to the commencement of a foreclosure action, and the plaintiff has the burden of proving compliance. In a recent Appellate Division decision, the Court defined what was never defined within the statute: Who is a borrower?
In Bank of New York Mellon v. Forman, the defendant cross-moved pursuant to CPLR 3211(a)(7) to dismiss the complaint or, in the alternative, for summary judgment dismissing the complaint insofar as asserted against her. The defendant argued, that the plaintiff failed to comply with the condition precedent to the commencement of this foreclosure action because the plaintiff did not serve her with the 90-day notice required by RPAPL 1304. The plaintiff did not dispute that it did not serve the 90-day notice upon the defendant. However, the plaintiff argued, that RPAPL 1304 applies only to borrowers, and that the defendant was not a borrower, as she had not signed the note.
The Court found that the mortgage instrument itself identified her as a “Borrower” and, in fact, under her signature was “Borrower” on the mortgage instrument. If, in fact, “borrower” is ambiguous, then it must be construed against the plaintiff who supplied the document at origination. Additionally, the legislative intent of the RPAPL 1304 notice is “to afford greater protections to homeowners confronted with foreclosure.” On the go forward, servicers should continue the most conservative approach to the parties receiving notices, and include all parties who may be considered a borrower on the note AND mortgage.
For more information regarding this case, please contact Deborah Gallo, Director of Operations at [email protected]
On September 13, 2019, Governor Cuomo signed into law an amendment to Section 1409(a) of the NY Tax Law requiring additional information to be provided upon filing Form TP-584 when the grantor or grantee of a 1-4 family residence, is an LLC. The new law is effective immediately, applies to all deeds recorded after September 23, 2019 and requires the identification of the names and business addresses of all members, managers and other authorized persons of the LLC. The statute goes on to state that if a member, manager or authorized person is itself any type of business entity (not just an LLC) the names and addresses of shareholders, directors, and authorized persons need to be provided until full disclosure of ultimate ownership by natural persons is achieved.
The New York State Department of Taxation and Finance has not yet amended Form TP-584. However, most companies are annexing a sheet which provides the space to list all members and their business addresses. Third party purchasers must provide this information in order to close.
Please contact Director of Operations, Deborah Gallo, at [email protected] with any questions.
On August 14, 2019, the New York State Real Property and Proceedings Law (RPAPL) Section 1307 was amended to reflect a new section (4)(k) which requires that a foreclosing lender “pay homeowners’ association or cooperative fees as needed to maintain the property.” RPAPL 1308 itself applies ONLY to vacant and abandoned one to four family residential property, and only applies to the first mortgage holder. Vacant and abandoned is defined under RPAPL 1309 as a property where after three consecutive inspections by the lender that 1. No occupant was present and there was no evidence of occupancy on the property to indicate that any persons reside there; 2 residential real property was not being maintained in a manner consistent with the standards in the NY property maintenance code.
Within seven business days of determining that the property is vacant and abandoned as defined by statute, the service must post a notice on an easily accessible part of the property that would be visible to the borrower, property owner, occupant, and monitor that the notice remains posted.
In addition to the other requirements already existing by statute, the recent change of law requires the servicer to pay homeowners’ association fees and cooperative fees. The existing statutory language requires the property be secured, boarded, winterized, attractive nuisances addressed, etc.
Since the servicer already has a process in place to address the existing requirements under RPAPL 1308, the team that handles these items will next have to flag the property in the servicing system for the advancement of funds in payment of these fees.
Cooperative security interest is for personal property that is mortgaged and fall under the UCC. Cooperative maintenance has priority to all liens, including, the security agreement. Thus, it behooves the servicer to pay outstanding cooperative maintenance.
As with all new statutes and changes, we can anticipate further litigation. For many years, first mortgagees relied on RPL Section 339-z which provides that the board of managers “shall have a lien on each united for unpaid common changes….prior to all other liens, except…taxes, all sums unpaid on a first mortgage of record, and…liens by a New York State Agency”
This new change will require a step by step analysis and a close review the developing case law.
Please contact Director of Operations, Deborah Gallo, at [email protected] with any questions.
Gov. Andrew Cuomo is reviewing a bill (S1864 and A4403) which amends the real property tax law to lower the tax redemption period for abandoned buildings from two years to one year for properties that have been certified as vacant and abandoned.
State and local municipalities are hoping to reduce the number of properties which are vacant and abandoned, as well as, the lessen the likelihood that demolition would be necessary.
We will be closely watching to see if this is signed by the Governor. From a servicer perspective, it will be more important than ever to monitor the taxes on the property and make sure that they are timely redeemed.
If you have any questions, please contact Deborah Gallo, Director of Operation, at [email protected]
